The Bay Area's status as a world center for alternative energy research got a power boost Tuesday when federal officials announced that a group led by the Lawrence Berkeley National Laboratory will build and operate a $125 million biofuels research center.

The announcement that one of three centers funded by the U.S. Department of Energy will be built somewhere in the East Bay came just five months after a team led by UC Berkeley landed an unprecedented $500 million grant from petroleum giant BP for a separate research institute on biofuels.

"This has been the hub for the biotech industry and also for Silicon Valley," said Cal Professor Jay Keasling, who is involved in both projects. "We really believe we can stimulate a green industry that will help develop the next generation of biofuels."

Those familiar with both projects say they will be complementary and share a goal of producing affordable, renewable road fuels from plant fiber to help reduce global warming and air pollution, decrease the nation's dependence on foreign oil and open new international energy markets.

Some experts believe affordable alternative fuels won't be widely available for drivers for five to 10 years, assuming research is successful.

The Energy Department project in the Bay Area will receive $25 million annually over the next five years to support work seeking high-tech chemistry breakthroughs to produce clean-burning fuels from plant fiber. The center is to receive its first allocation in October.

The center, to be known as the Joint BioEnergy Institute, eventually will be staffed by 130 scientists, researchers and support personnel. Also involved in the Bay Area project are UC Davis, Stanford, Lawrence Livermore National Laboratory and Sandia National Laboratories.

The Energy Department awarded the two other bioenergy centers to groups based at Oak Ridge National Laboratory in Tennessee and the University of Wisconsin in Madison.

The three centers, combining researchers from 18 universities, seven federal labs and at least one nonprofit organization, will bring basic biofuel research to the point where it can make a smooth transition to applied research, according to the Energy Department.

The centers stem from President Bush's goal of reducing U.S. gasoline consumption by 20 percent within 10 years through increased efficiency and diversification of clean energy sources. A second goal calls for making cellulosic ethanol cost-competitive with gasoline by 2012.

If production costs can be cut dramatically, cellulosic ethanol is a potentially cheaper and more energy-efficient fuel than ethanol made from corn grain. It is derived by breaking down the carbon stored in the woody and fibrous parts of plants.

The Bay Area center's work will initially take place at Lawrence Berkeley lab's West Berkeley Biocenter. It later will move to a permanent home in a leased building somewhere in the East Bay.